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At Lux Opes, we break down the latest company news into quick takes that get straight to the point - what happened, why it matters, and what to watch next.

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Soitec (SOI France): photonics excitement collides with a brutal earnings reset

Soitec has become one of the more extreme examples of the disconnect currently visible across parts of the semiconductor sector, where long-term AI enthusiasm is overwhelming what still looks like a very difficult near-term earnings picture.

The company is due to report FY2026 results this week and expectations for the year are exceptionally weak operationally. Revenue is expected to decline over 30% while EBITDA could fall almost 50% as the group continues to deal with a deep correction in RF-SOI demand, weak automotive exposure through Power-SOI and deliberate factory underloading aimed at reducing inventories and preserving cash flow. Net profit is expected to turn negative for the first time in quitre some time, partly because of €65m in non-recurring charges already booked earlier in the year.

Operationally, this remains a severe downturn for the business even if parts of the market seem increasingly willing to look through it. The key issue is that the core smartphone-related RF-SOI business has still not stabilised properly and visibility remains unusually poor for what used to be a fairly predictable franchise.

What makes the current situation more complicated is that investors are no longer valuing Soitec primarily on the basis of the current earnings cycle. The stock has surged dramatically this year because the market is focusing almost entirely on photonics and AI-related optionality. Soitec already has exposure to photonics substrates and is viewed as one of the more credible European suppliers positioned around future AI infrastructure demand.

The problem is that the current valuation appears to imply an extremely aggressive growth trajectory that management itself has not yet endorsed. Based on current trading levels, investors seem to be pricing in something close to a fivefold increase in photonics-related revenue over the next four years. Management’s own framework is materially more conservative, pointing more toward annual growth of 20-30% in that business rather than the type of explosive ramp currently embedded in the share price. That creates a difficult setup because the market is effectively capitalising a future business that still remains relatively small while the core operations continue going through a major cyclical and structural slowdown.

The broader operational outlook also remains cautious. Current forecasts assume little real recovery before FY2028 as inventory reduction, lower factory utilisation and restructuring measures continue through FY2027. Smartphone demand remains sluggish globally and automotive semiconductor markets are still digesting excess inventory after the post-pandemic boom period.

None of this is currently the main focus for investors because attention has shifted almost entirely toward AI and photonics exposure. Still, at roughly 35x forward EV/EBITDA, the valuation now assumes a very optimistic medium-term scenario.

The long-term strategic positioning may well prove attractive, particularly if photonics adoption accelerates meaningfully across AI infrastructure, but the near-term earnings reality still looks extremely challenging.

Sartorius (SRT3 Germany): 2026 still the bridge year before a fuller normalisation

Sartorius hit the road recently, reiterating a message that has been consistent for several quarters: the bioprocessing market remains structurally healthy, demand for consumables is solid across regions and modalities, and the last missing piece of the puzzle is the normalisation of equipment orders.

The company continues to expect the Bioprocess Solutions market to grow 8-10% per year, driven by sustained biopharma investment, the expansion of biologics pipelines and the increasing penetration of single‑use technologies. Even so, 2026 is still viewed as a transitional year. Equipment demand has not fully recovered, and the mix remains skewed toward consumables, which currently represent about 85% of BPS revenue versus a more normalised 80%. The company sees this imbalance gradually correcting as the year progresses.

The equipment outlook is improving. Q1 was still down in the mid‑single‑digit range, but the order book for Q2 and part of Q3 points to stabilisation and early signs of recovery. Sartorius expects equipment sales in 2026 to be at least flat year on year, which would mark a turning point after several quarters of destocking and delayed investment decisions by biopharma customers. The company’s view is that once equipment demand normalises, the bioprocessing market will again operate as a coherent system, with consumables and equipment growing in tandem. This is important because equipment orders tend to be leading indicators of capacity expansion and future consumables pull‑through.

Single‑use technologies remain a central pillar of the growth story. Sartorius’ integrated offering across upstream and downstream workflows allows customers to accelerate development timelines and operate with more flexible, lower‑capex production setups. Penetration in commercial manufacturing remains below 20%, while clinical adoption is already above 85%. This gap represents a long runway for growth as more biologics move into late‑stage development and commercialisation. The company also continues to supply a meaningful volume of consumables to stainless‑steel facilities, which provides an additional buffer during periods of slower equipment investment. With leadership positions in single‑use manufacturing, process intensification and advanced therapies, Sartorius aims to outgrow the market by ~150bp per year, consistent with its mid‑term guidance of 9-12% annual growth for BPS.

Downstream processing is emerging as a major opportunity. While upstream efficiency has improved significantly in recent years, downstream remains a bottleneck for many bioprocessing workflows. Sartorius’ Pionic platform, a modular ready‑to‑use system covering chromatography, filtration, viral inactivation and ultrafiltration, is designed to address this constraint. The company has already gained traction in chromatography, but Pionic is expected to accelerate share gains in downstream, where Sartorius’ current market position is below its overall footprint. If successful, this could meaningfully expand the company’s addressable market and strengthen its competitive positioning.

Sartorius remains well placed to benefit from the next phase of bioprocessing growth. Consumables remain resilient, equipment is showing early signs of recovery, and the company continues to invest in platforms that address structural bottlenecks in the industry.

Richemont (CFR Switzerland): jewellery keeps separating Richemont from the rest

Richemont continues to look increasingly distinct from much of the broader luxury sector because the strength of its jewellery division is still offsetting weakness visible elsewhere across soft luxury and aspirational spending.

The latest full-year results again show that dynamic. Revenue growth accelerated to 13% in Q4, comfortably ahead of market expectations, with the Jewellery Maisons once more driving the story. Cartier and Van Cleef & Arpels continue operating at a level few competitors can currently match, supported by strong demand in the US and renewed momentum across Asia. Jewellery growth reached 16% in the quarter despite already demanding comparisons. Even the watch activity inside those maisons continues performing strongly, particularly at Cartier. Specialist Watchmakers still grew, though the pace moderated meaningfully compared with previous quarters, reflecting softer conditions across the broader watch market.

That divide inside Richemont increasingly reflects what is happening across luxury as a whole: ultra-high-end jewellery continues attracting spending while broader discretionary luxury categories remain more dependent on a still uneven consumer recovery.

Margins remain under pressure for now, though the drivers are well understood. Gross margin declined sharply during the second half as foreign exchange movements, higher gold prices and tariff impacts all weighed on profitability. The gold impact alone appears significant, especially given Richemont’s jewellery exposure.

Still, the operational discipline inside the business remains impressive. Despite those headwinds, operating margin only declined modestly because cost growth stayed tightly controlled throughout the year. Operating expenses increased just 1% for the full year despite continued revenue growth and ongoing investment in the maisons. That operational leverage should become more visible again if gold prices stabilise and pricing actions gradually return later in the year. Management has not yet implemented broad-based price increases for FY2026-27, which partly explains why investors remain focused on margin pressure over the next couple of quarters. Even so, the underlying demand environment still looks very strong for the core jewellery franchises, particularly in the Americas and Asia-Pacific where momentum accelerated again into year-end. Japan remained exceptionally strong as well, helped by local demand and pricing actions linked to currency movements.

Re capital-allocation: Richemont increased the ordinary dividend by 10%, added a special dividend and launched a buyback programme while ending the year with close to €8.5bn of net cash. That balance-sheet strength gives the company considerably more flexibility than many peers currently have. The market is increasingly rewarding that combination of pricing power, category leadership and financial strength.

Richemont now trades at a meaningful premium to groups like LVMH, but the gap is becoming easier to justify operationally. Jewellery continues outperforming nearly every major luxury category globally and Richemont remains one of the cleanest ways to access that trend.

The bigger question for investors now is about sustainability of growth once pricing effects fade and comparisons become tougher. Growth will almost certainly slow from current levels, but the broader luxury sector still lacks many businesses delivering this combination of double-digit category momentum, balance-sheet strength and disciplined cost execution.

Südzucker (SZU Germany): a sharp reset year, uneven segment dynamics and a cautious outlook for 2026‑27

Südzucker’s recent final FY 2025‑26 numbers confirm what the prelims had already signalled: a broad‑based decline across most divisions, a meaningful contraction in profitability and a year shaped by lower pricing, weaker volumes and normalisation after two exceptionally strong cycles.

Group revenue fell 13.8% to €8.35bn, slightly below expectations, while EBITDA dropped 26% to €535m. The operating result halved to €163m. These figures sit within guidance but highlight how quickly the environment has cooled across sugar, starch and special products, with only CropEnergies and fruit providing partial offsets.

The sugar division was the main drag. Revenue declined 28% to €2.79bn, driven by lower prices and a drop in sales volumes to 3.7m tonnes from 4.4m tonnes the prior year. The operating loss widened to €177m, reflecting both the pricing reset and the volume contraction. Special products also softened, with revenue down 2.6% to €2.22bn, partly due to the disposal of Richelieu’s US dressing and sauce business. Operating profit fell nearly 13% as lower selling prices and higher costs weighed on margins. Starch saw a 4.6% revenue decline and a 42% drop in operating profit, reflecting falling prices and weaker volumes across key product categories.

CropEnergies was the outlier on the positive side. Revenue fell 17% to €793m, but operating profit rose sharply to €37m, helped by lower raw‑material and energy costs and a stronger fourth quarter. Scheduled and unscheduled maintenance, along with the temporary closure of the Wilton site, limited volumes, but the margin recovery shows how sensitive the segment is to input‑cost dynamics. The fruit division delivered stable revenue at €1.65bn and a slight improvement in operating profit to €105m, supported by better margins despite lower juice‑concentrate volumes.

The group’s EBITDA margin fell to 6.4% from 7.5%, but still came in ahead of internal expectations thanks to the stronger‑than‑expected contribution from CropEnergies and a resilient performance in fruit. The deterioration in sugar, special products and starch underscores the cyclical nature of Südzucker’s portfolio and the difficulty of offsetting simultaneous headwinds across multiple segments.

For FY 2026‑27, the company maintained its guidance: revenue between €8.0bn and €8.4bn and EBITDA between €480m and €680m. The wide EBITDA range reflects the inherent volatility of the markets in which Südzucker operates, particularly sugar and biofuels. Current expectations sit toward the middle of the range, but visibility remains limited. Pricing trends, energy costs and agricultural markets will again determine the trajectory.

A cautious stance remains needed. The group is navigating a cyclical downturn across several divisions, and while some stabilisation is possible in 2026‑27, the recovery path is neither linear nor guaranteed. The diversified portfolio provides some protection, but the overall earnings profile remains exposed to volatile commodity‑linked dynamics.

Delivery Hero (DHER Germany): Uber’s bid crystallises the valuation debate

Delivery Hero has spent years trading at a large discount to global food-delivery peers because investors never fully trusted the quality of the company’s cash generation, despite the scale of the platform and the strength of its positions across emerging markets. Uber’s €33 per share approach changes that discussion materially because it effectively places a ceiling on the standalone valuation argument while simultaneously validating that Delivery Hero’s international footprint still holds strategic value for a global consolidator.

The company confirmed that Uber Technologies approached it with an indicative proposal of €33 per share for a full takeover. The timing is not particularly surprising. Uber has steadily increased its exposure to Delivery Hero over recent months and now controls close to 20% of the company, alongside additional option exposure. The logic behind the move is fairly simple. Uber remains dominant in North America, but outside the US the competitive landscape has become increasingly fragmented and aggressive, particularly following DoorDash’s continued international push. Acquiring Delivery Hero would instantly strengthen Uber’s position across Europe, the Middle East and Asia, while also giving it access to markets where building scale organically would likely take years and require substantial capital.

From a valuation perspective, the situation is becoming harder to argue aggressively in either direction. Before the takeover speculation emerged, Delivery Hero was trading closer to €20 per share and still carried a substantial discount to peers because investors remained concerned about free-cash-flow conversion and ongoing capital intensity. Even now, despite generating more than €900m in adjusted EBITDA, the company still converts only a relatively modest portion of that into reported free cash flow. That remains the central issue for many investors. Delivery businesses can produce impressive EBITDA growth while still requiring significant spending on logistics, incentives, technology and market share defence. Uber’s bid therefore effectively acknowledges that Delivery Hero may be more valuable inside a larger ecosystem than as a standalone listed entity. At roughly 14-15x forward EV/EBITDA, the proposed valuation already brings Delivery Hero broadly in line with peers such as DoorDash, Grab Holdings and Meituan. The premium versus historical trading levels is substantial, even if some investors may still argue the strategic value deserves a higher number.

The interesting part now is less about whether the current share price looks fundamentally cheap and more about deal dynamics. Delivery Hero management may attempt to negotiate a higher price, especially given the strategic importance of the assets involved and Uber’s visible desire to expand internationally. At the same time, the room for a dramatically higher offer may not be enormous given where peer multiples currently sit and the operational challenges that still exist across the sector.

The planned departure of CEO Niklas Östberg in 2027 also potentially increases the probability of a deal getting done because it creates a more natural window for a transition. Investors now essentially face a merger-arbitrage type setup. The company no longer trades on long-term operational upside alone, but increasingly on the probability, timing and final structure of a transaction.

Operationally, Delivery Hero still owns attractive assets and meaningful geographic exposure, particularly in MENA and Asia. The issue is that public markets have repeatedly shown limited patience for delivery platforms that struggle to translate scale into durable free cash flow. Uber’s approach may therefore end up being remembered less as an opportunistic bid and more as the moment the sector’s consolidation phase accelerated materially.

Autotrader (AUTO UK): solid FY despite a soft Q4, early signs of recovery into FY27

Autotrader’s FY26 results (year to 31 March 2026) reflect a business that hit a clear soft patch late in the year but is already showing signs of re‑acceleration in early FY27.

Management described the end of the financial year as challenging, driven by retailer profitability pressure and higher‑than‑expected contract churn in November and December. However, the company emphasised that key indicators (retailer numbers, stock levels and upsell activity) have all begun to improve since year‑end, suggesting the trough is behind them.

Full‑year revenue rose 4% to £624m, slightly below expectations, with ARPR up 5% to £2,995 per month. Inventory dynamics were a drag through most of FY26 but have turned positive in recent weeks. EBIT came in at £392.7m, up 4% but modestly below forecasts. The core Auto Trader business maintained a 70% margin, while the group margin of 63% reflects the still‑loss‑making Autorama unit. Importantly, Autorama’s losses narrowed to just £2m on £39m of revenue, confirming the path toward breakeven.

Segment performance was mixed. Trade revenue grew 4%, supported by stable retailer numbers (‑0.5%) and ARPR growth. Consumer services fell 8%, driven by an 11% decline in private listings, though this was offset by growth in manufacturer & agency revenue. Traffic remains robust, with more than 9 million monthly unique visitors and 80% direct traffic, a key competitive advantage. Management also noted that AI chatbots currently account for less than 1% of traffic sources, countering market fears of rapid disintermediation.

The conference call also highlighted a few important messages. First, retailer profitability was weaker than expected in late 2025, driving higher churn and a softer run‑rate entering FY27. Second, the recovery since year‑end appears broad‑based, with retailers, stock and upsells all trending upward. Third, Auto Trader plans to return more than £1bn to shareholders across FY26 and FY27, supported by accelerated buybacks and a final dividend of 7.8p.

Guidance for FY27 is cautious but achievable: EBIT of £395-415m and at least high‑single‑digit EPS growth, driven largely by buybacks. The company expects to maintain group margins (excluding vehicle/accessory sales) at a minimum.

Overall, FY26 was solid given the late‑year slowdown, and early FY27 trends are encouraging. But with retailer profitability still fragile and Autorama not yet fully de‑risked, the stock lacks a near‑term catalyst.

Sphera Franchise Group (SFG Romania): sales are stabilising, but the cost base is where the issues are

Sphera started 2026 with a slightly better sales backdrop, particularly in Romania where the core KFC business continued to recover after a difficult period marked by weak traffic and pressured consumer spending.

Group restaurant sales rose 4.2% in Q1 to RON 378m, with Romania growing close to 5% and same-store sales at KFC Romania returning to positive territory for a second consecutive quarter. That is probably the most important operational signal in the release because the company’s investment case increasingly depends on whether the Romanian consumer environment is genuinely improving or simply bouncing temporarily from a weak base. KFC remains the central earnings engine of the group and management has clearly prioritised rebuilding traffic through marketing intensity and network expansion.

The issue is that the recovery in volumes is not yet translating into healthier profitability. EBITDA declined 3% year-on-year and operating profit dropped almost 15%, showing that the cost structure is still absorbing most of the top-line improvement. Investors hoping for a cleaner margin recovery after the difficult 2025 period instead received another quarter where operating leverage moved in the wrong direction.

The pressure came from multiple directions simultaneously. Advertising expenses jumped almost 28% as management increased promotional activity and supported new openings across the network. Lease expenses continued climbing because of indexation and ongoing expansion, while payroll inflation, although moderating compared with last year, still grew faster than revenue. The only major positive element on costs was food and material expenses, where procurement discipline helped improve the ratio modestly. Even there, however, the benefit was nowhere near large enough to offset the broader inflationary pressure moving through the P&L. This explains why restaurant-level margins compressed materially despite sales growth accelerating slightly versus Q4. Pizza Hut remains another complication inside the story.

Management is actively restructuring the chain and already closed seven underperforming locations earlier this year. While that should improve operational quality over time, it also means the division is currently shrinking and contributes additional drag during the transition period. Same-store sales at Pizza Hut stayed negative in Q1, confirming that the turnaround remains incomplete and that the brand still lacks momentum.

The focus is now revolves around whether the company’s full-year targets are realistic. Sphera is guiding for roughly 8% sales growth during the remainder of the year alongside a flat EBITDA margin, but the Q1 print does not provide much evidence supporting that scenario yet. To achieve the budget, the company needs a significantly stronger performance across Q2 to Q4, including better operating leverage despite continued spending on marketing, expansion and labour. That becomes harder in an environment where Romanian consumers remain selective and competition across quick-service restaurants continues intensifying.

The market also appears increasingly focused on quality of growth rather than simple network expansion. Investors are no longer rewarding restaurant operators purely for opening stores if margins simultaneously deteriorate. At current valuation levels, Sphera already trades as a company expected to deliver a cleaner recovery profile over the next two years. The latest quarter instead showed a business still fighting to regain margin stability while carrying elevated execution risk across multiple brands.

Quadient (QDT France): long‑term mix shift still underappreciated

Quadient’s Q1 update delivered stable execution, continued strength in Digital, a slower decline in Mail and no change to full‑year guidance.

Revenue came in at €243m, essentially in line with expectations and down 1.9% organically. The headline decline was driven almost entirely by FX, the euro–dollar impact alone represented a €12m drag, or nearly five percentage points of headwind. Management expects this effect to fade as the year progresses.

The quarter once again highlighted the diverging trajectories within the portfolio. Digital grew 6.8% organically, with subscription revenue up a robust 10.8%. Annual recurring revenue reached €257m, up nearly 16%, confirming the stickiness and scalability of the platform. The Mail division declined 5.2%, but this represents a clear improvement versus the high‑single‑digit declines seen in prior quarters. Management’s new assumptions (a 7.5% drop in mail volumes, a 6% contraction in the addressable market and a 5% decline for Quadient’s own Mail business) seem realistic and achievable. Lockers revenue fell 3.8% due to tough comps, but subscription revenue grew 18%, reinforcing the long‑term attractiveness of the model.

Management remains confident in the growth engines. Digital is expected to become the largest division by 2030, with revenue now targeted at €550m versus the previous €500m ambition, almost double the €282m delivered in 2025. The Serensia platform, regulatory tailwinds in electronic invoicing and AI‑enabled workflow automation are central to this trajectory. Lockers also retains strong momentum, with a 2030 revenue target above €200m compared with €114m today. Both businesses are scaling with attractive margin profiles and high recurring revenue intensity.

Guidance for 2026 is unchanged: organic growth between –2% and +2%, and divisional EBITDA margin floors of >25% for Mail, >20% for Digital and >10% for Lockers. Our forecasts remain aligned with this framework, with expected EBITDA of €236m (+2.5% YoY) and EBIT of €137m (+1.8%), implying a 40bp margin expansion to 13.4%.

Also important, the valuation disconnect remains striking. The stock is down ~15% year‑to‑date and trades at only roughly 4.5x 2026 EBITDA, a strong discount to historical averages. The market continues to treat Quadient as a structurally declining Mail operator, ignoring the fact that Digital and Lockers could represent over half of EBITDA by 2030 versus 25% today.

Sage Group (SGE UK): steady execution keeps the mid-market story intact

Sage continues to look like one of the more stable software stories in Europe at a time when investors remain deeply sceptical about how artificial intelligence will reshape the sector’s economics.

The latest half-year results did not contain a dramatic surprise, but they reinforced something arguably more important for the investment case: consistency. Subscription growth stayed firmly above 10%, recurring revenue trends remained healthy and the company again demonstrated that its customer base in accounting, payroll and financial management remains resilient even in a softer macro environment. ARR growth accelerated slightly compared with the exit rate from last year, helped by a combination of improving retention, stronger cross-selling and continued migration toward cloud products.

The quality of growth is important. Sage is increasingly skewing toward mid-market customers, which tend to be financially stronger, less sensitive to small economic swings and more receptive to adopting additional modules over time. That dynamic is gradually improving the durability of the revenue base and helping offset concerns that smaller software vendors could lose relevance as AI tools become more widespread.

The most closely watched topic remains AI itself, and here Sage’s messaging continues to sound relatively confident. Investors have spent the past year questioning whether accounting and finance software could become vulnerable to disruption from AI-native competitors. Sage’s argument is effectively that trust, compliance and workflow integration still matter enormously in financial software, particularly for SMEs running critical operational systems. The company is beginning to monetise some AI functionality, although management made clear that adoption and customer integration remain the primary focus for now. Importantly, the company says it is not seeing any meaningful increase in churn linked to new AI entrants. That is a notable point because software investors have become extremely sensitive to any indication that legacy platforms are losing relevance.

The strong performance of Sage Intacct also reinforces the broader thesis that the company still has meaningful runway in cloud migration and international expansion. Intacct continues growing above 20% in the US while international growth remains significantly faster, particularly in the UK and increasingly in continental Europe. Combined with the continued expansion of Sage Business Cloud, this gives the group several overlapping growth drivers at a time when many traditional software vendors are struggling to reignite momentum.

Sage remains disciplined operationally. Margin expansion in the first half was strong, but management still avoided becoming overly aggressive with full-year profitability guidance. That caution fits the company’s broader communication style and probably helps credibility with investors.

Unlike many software companies that aggressively promote long-term AI optionality, Sage is still presenting itself primarily as a compounder built on recurring revenue, customer retention and gradual cloud migration. The market has not fully rewarded that profile recently because software sentiment remains fragile, particularly after weakness in several US peers. The sharp sell-off in Intuit also created negative read-across for the sector, even though Sage’s exposure is materially different and far less dependent on consumer tax activities.

At current valuation levels, the disconnect is becoming increasingly noticeable. Sage continues to generate healthy free cash flow, recurring revenues remain highly visible and the company is still posting growth rates many enterprise software businesses would struggle to achieve in the current environment. The market appears reluctant to pay premium multiples for software until the AI disruption debate becomes clearer.

Steyr Motors (4X0 Austria): weak Q1 raises the execution bar, but valuation still compelling

Steyr Motors began the year with a slow first quarter, as revenue held at €11.7m and EBIT dropped to €0.9m, well below the prior year. The softer performance came mainly from delays in larger orders from India and the Middle East, where geopolitical tensions pushed deliveries into later periods. The company stressed that these projects remain active and are expected to resume, but the timing shift reduced early‑year momentum. Profitability was also affected by ongoing investments in capacity, including higher headcount, which the company views as necessary to support the larger workload expected later in the year.

Despite the weak start, Steyr Motors kept its full‑year guidance unchanged. The company still aims for revenue between €75m and €95m in 2026, implying year‑on‑year growth of 55-95%, along with an adjusted EBIT margin above 15%. Management expects a sharp acceleration in the second half of the year, helped by stronger demand for unmanned surface vehicles, additional activity from European defence programmes, and the consolidation of the BUKH acquisition starting in the second quarter. BUKH is expected to add around €7.5m in revenue across the final three quarters. Even with the company’s usual seasonality and a historically strong fourth quarter, reaching the lower end of the guidance range would require an average of roughly €21m in quarterly revenue for the rest of the year, almost double the first‑quarter level.

The gap between the slow opening quarter and the ambitious full‑year targets places significant weight on the upcoming quarters, especially the second quarter, which will indicate whether the expected ramp‑up is materialising. The company’s order patterns have always been uneven, but the combination of geopolitical delays and a back‑end‑loaded plan increases execution risk. Still, management maintains that the delayed orders will convert, and the investments in capacity are intended to ensure the company can handle the higher volumes once they come through.

Even with a lower revenue assumption, the company is still seen as capable of reaching its margin target as higher volumes improve operating leverage. The question for the rest of the year is how quickly delayed orders return and whether the planned acceleration in defence and USV activity can offset the slow first quarter.

Abivax (ABVX France): New long‑term data strengthen confidence ahead of phase 3 readout

Abivax released its first‑quarter results alongside new three‑year data from the open‑label phase 2a/2b study of obefazimod in ulcerative colitis.

The update focused on patients who had already been treated for two to four years and were then switched from a 50 mg dose to 25 mg. After 144 weeks, 68% of the 130 patients remained in clinical remission, and 80% completed the full follow‑up period. No new safety issues were identified. Some patients have now been on treatment for nearly seven years, which adds weight to the long‑term safety and durability profile of the drug in a chronic condition where sustained response is essential.

Operationally, the company is preparing for several major milestones. Results from the phase 3 ABTECT maintenance study in ulcerative colitis are expected by the end of the second quarter of 2026. If the data are positive, the company plans to submit its regulatory application in the fourth quarter. In parallel, phase 2b results in Crohn’s disease remain on track for the end of 2026. This programme is viewed as particularly important because the commercial opportunity in Crohn’s is larger than in ulcerative colitis, and success there would broaden the potential reach of obefazimod.

Cash and cash equivalents stood at €491.6m at the end of March 2026, giving visibility through to the fourth quarter of 2027. Research and development spending rose to €49.5m, an increase of €10.2m compared with the same period last year. The rise reflects investment in new indications, the Crohn’s programme, and manufacturing and commercial preparations ahead of a possible launch. These costs are expected to remain elevated as the company advances multiple late‑stage studies and prepares for potential regulatory filings.

The long‑term data are seen as reassuring ahead of the upcoming phase 3 readout. Although the study was open‑label and lacked a control arm, the persistence of remission after dose reduction supports the idea that obefazimod can deliver durable benefit over many years.

Ferrari (RACE Italy): the Luce shows Ferrari is willing to take bigger risks than the market expected

Ferrari’s unveiling of the Luce probably marks one of the boldest product decisions in the company’s modern history.

The group has spent decades building an identity around low-volume combustion-engine supercars with unmistakable styling cues and emotional appeal rooted in sound, mechanical character and heritage. The Luce moves sharply away from that formula. The car introduces a fully electric drivetrain, a five-seat configuration, crossover-inspired proportions and a design language that looks deliberately disconnected from traditional Ferrari aesthetics.

Initial reactions from Ferrari enthusiasts have been highly polarised, with a large portion of the core audience responding negatively to the exterior design. That reaction matters because Ferrari has historically been unusually successful at protecting brand desirability and residual values by maintaining very tight alignment between product identity and customer expectations.

The Luce appears intentionally designed to challenge those assumptions. Whether this becomes a visionary long-term move or a strategic misstep will likely depend less on launch-week reactions and more on whether Ferrari succeeds in attracting an entirely new luxury buyer demographic without alienating its existing base.

From a technical perspective, the Luce does not appear positioned as the most extreme EV on the market. The specifications are strong in absolute terms, including an 800V architecture, 350kW charging capability, more than 530km of range and 0-100km/h acceleration in 2.5 seconds, but none of those figures fundamentally reset benchmarks inside the high-end EV segment. Even within Ferrari’s own lineup, some combustion and hybrid models already deliver more dramatic performance metrics. That seems intentional. Ferrari is clearly trying to avoid building a car defined purely by acceleration statistics or battery size because that battle becomes extremely difficult to sustain in EV markets where technological advantages tend to compress rapidly.

Instead, the company appears to be leaning heavily into driving feel, exclusivity, interior execution and design differentiation. The interior may ultimately become the strongest aspect of the product. Early feedback has been materially more positive there, particularly regarding the blend of analog and digital elements and the use of premium materials.

Ferrari also appears determined to preserve a level of technical exclusivity by developing battery modules internally and integrating advanced chassis technologies derived from the F80 programme. Still, the biggest challenge may simply be pricing. At roughly €550k before options, the Luce enters the market at a level far above other luxury EVs while simultaneously lacking the traditional Ferrari emotional formula many buyers associate with the brand.

Financially, the Luce is unlikely to become transformational for Ferrari. Expectations already point toward a niche product with annual volumes around 1,000 units at peak, representing a relatively small portion of total deliveries. That limitation is probably intentional because Ferrari will likely prioritise preserving exclusivity and residual values over chasing scale. Residual value protection becomes particularly important in EVs where depreciation trends across the industry have been significantly weaker than in traditional luxury combustion cars. Ferrari’s hybrid lineup has already shown some early signs of higher depreciation pressure versus the group’s historical norms.

That creates a more complicated long-term strategic issue for the company because Ferrari’s business model depends heavily on scarcity, pricing discipline and the perception that its vehicles remain collectible assets. Electrification potentially weakens some of those structural advantages if technology cycles accelerate and used values become less stable.

The Luce therefore feels less like an attempt to maximise profits immediately and more like Ferrari preparing for a future where luxury performance customers increasingly expect electrified offerings. The market probably understands that logic. The bigger uncertainty is whether Ferrari can modernise the brand without diluting the very characteristics that allowed it to become one of the most valuable names in the global luxury sector.

STMicroelectronics (STMPA France): infrastructure exposure is changing how the market values the business

STMicroelectronics is increasingly moving away from the profile investors associated with the company for most of the past decade. Historically, STM traded largely as a cyclical semiconductor supplier tied to industrial demand, automotive inventories and periodic swings in consumer electronics.

The current investment case is becoming materially different. Management continues to sound highly confident not only about near-term demand conditions but also about the structural evolution of the group’s revenue mix. The most important theme remains the acceleration of infrastructure-related businesses, particularly data centres and satellite applications inside the CECP division. Management now expects CECP growth of roughly 50-60% this year, with momentum strengthening further in the second half.

This is important because infrastructure markets tend to carry longer visibility, higher barriers to entry and significantly lower cyclicality than STM’s traditional end markets. Investors are beginning to price that shift more aggressively into the shares, which already rallied sharply this year alongside the broader semiconductor sector. Even after the move, however, STM still trades at a noticeable discount to several peers despite growth and margin trajectories that increasingly resemble higher-quality infrastructure semiconductor stories.

Operationally, the current environment looks significantly tighter than many investors expected only a few quarters ago. Lead times for certain microcontroller families have extended toward 28 weeks and supply constraints are reappearing in products such as MEMS. That dynamic is already creating selective pricing pressure in distribution channels. Importantly, management appears determined not to repeat the inventory excesses that damaged parts of the industry during 2022 and 2023. The company continues emphasising disciplined allocation and cautious inventory management despite the much stronger demand backdrop. Q2 growth above 11% quarter-on-quarter confirms that the recovery is already moving far beyond normal seasonal patterns. Part of this reflects the end of inventory correction in automotive and industrial markets, but the faster acceleration clearly comes from infrastructure demand. Capacity utilisation is rising rapidly again, moving from 70% in Q1 toward roughly 80% in Q2, with additional improvement expected during the second half.

That operational leverage is important because STM’s margin profile can change quickly once utilisation rises. The market is increasingly focusing on the possibility of a very sharp earnings inflection over the next two years, particularly if gross margin expansion continues alongside the mix shift toward photonics and infrastructure products.

The photonics opportunity is becoming central to the long-term narrative. Management confirmed identified customer demand of roughly $1bn in 2026 and $2bn in 2027, while official guidance still remains materially lower because the limiting factor is now manufacturing capacity, not customer interest. STM plans to quadruple photonics capacity by 2027 and sees a path toward becoming the leading foundry player in that market. That ambition is strategically important because photonics is emerging as a critical enabling technology for AI infrastructure, optical interconnects and high-bandwidth data transmission inside next-generation data centres. STM believes its fully native 300mm manufacturing platform gives it a structural advantage versus competitors such as GlobalFoundries and Tower Semiconductor.

Investors increasingly appear willing to assign higher multiples to that potential, especially given how aggressively the market is rewarding AI infrastructure exposure across semiconductors. The stock’s rerating this year already reflects part of that enthusiasm, but management’s argument is that STM still trades below peers despite earnings growth and margin expansion that are accelerating quickly.